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This open class action lawsuit is closed!
This Open Class Action Lawsuit is no longer active. Check out other open class action lawsuits you may qualify to join on our list of open lawsuits.
Are you a merchant who has used a Square credit card reader to process a transaction?
If so, you may be eligible to join a free Square payment fees class action lawsuit investigation.
Unreasonably high fees have been allegedly imposed on merchants who use a Square credit card reader, according to a payment fees class action lawsuit filed in April 2021.
The merchants who filed the class action allege that the credit card processing fees violated antitrust and unfair competition laws and caused them to lose money.
Square Payment Fees Class Action Lawsuit
A group of four merchants filed a class action lawsuit in April 2021 on behalf of themselves and other businesses in certain states that accept payment with Square’s services.
They claim that the credit card processing fee is imposed as part of a price-fixing agreement among banks.
“The Interchange fee is purely a toll that the credit-card issuing banks, in a collective exercise of monopoly power, decided to levy on each credit card transaction,” according to the Square class action lawsuit.
This class action lawsuit is asking the court to direct the credit card giants to change their rules restraining credit card surcharging. The plaintiffs are seeking the maximum amount of monetary relief allowed under the applicable state statutes.
Are you a merchant who uses Square payment for credit card processing? We want to hear from you! Tell us about your experience in the comment section below.
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62 thoughts onSquare Payment Fees Class Action Lawsuit Investigation
I’m a merchant, previously processing through Square until Oct 2023. Annual transaction volumes of around $30m, extremely low chargeback rates, and zero fraud on record. AAA customer by all accounts.
After years of processing, out of the blue, Square informed us that they require a 30% reserve to be held of all transactions, for 120 days.
We promptly informed them that this was unacceptable, that we formally disagree to the new terms, and then we made provisions to move to another merchant services provider. This took around 45 days. Switching to a new provider and setting up the I.T. back end is not a simple process, and Square is aware that they have the customer in a choke-hold.
Meanwhile Square continued to process our transactions, keeping 30% or each transaction while we made the switch.
Now, 5 months later, Square informs us that they still intend keep the reserve ($1.3m) until Apr 2024 (7-8 months after the transactions were processed?!). Their merchant portal mis-states that they are already paying the reserve back to us, but no funds have been returned to us. They seem to be simply holding onto these reserves indefinitely, without explanation or reason.
They are currently not answering emails, and do not seem to be responsive. Heads in the sand.
I wonder how many other merchants are in this position, where Square signs customers up without due-diligence, then retrospectively slaps on a reserve months/years later, for no reason, after the client is locked in. Meanwhile the merchant has no choice but to stick with Square, since the switching costs are too great. Basically a bait & switch under duress? Of course, their one-sided T&Cs “allow” them to make unilateral changes, but surely even this has its limits, restricted by basic principles of fairness and good faith? At any rate, no sensible merchant would initially sign up with Square with a 30%, 120 day reserve. These are terms that simply aren’t viable for most businesses, and Square would only dare to apply such terms retrospectively. Their sales team and their underwriting dept. seem to have an understanding?
Square’s dishonest actions would seem to be damaging to merchants such as myself. At what point do they risk a class action suit?
Square Up never notified me that this was happening and how to apply to be part of the class action. I was notified by another merchant. Is it too late to apply? What ever happened with this?
Square is withholding transferring my funds because they are requesting more info regarding CBD, which is less than 1% of my credit card transactions. The products fall within the legal limits. Each time they say that they are reviewing my case and that I will hear from them within 1 – 2 days. I provided them the info on 11/9; they are now withholding over $35k. I have been going back and forth with their company without resolution. I cannot even switch companies at this time because they are holding my money hostage.
So I was just setting up my account and I was just doing a charg on my own credit card just to see how it would process and I would get y money well it was suppose to be 40 but it turned it to 400.00 and now their not refunding my money back and keep putting me through all this mess and when I. Done complying with them they ask my for something else it’s been 6 weeks already
I need my settlement
We are a leading Franchisor with numerous Franchisees under our belt. For a while now, we have entrusted Square with our online payments, POS, and other transactional needs.
However, recently, we faced two unsettling incidents with Square.
The most recent incident I wish to highlight pertains to Square’s loan offerings for small businesses. Square offers these loans, advertising them as “interest-free.” However, they charge a flat fee. For instance, if you borrow $1000, they’ll demand $1100 in return. Furthermore, Square deducts 18% from your daily transactions until the loan is settled. Some states have a cap on the annual interest chargeable. Our first loan with Square was $4800, with a stipulated return of $5500. Due to our high volume of transactions and Square’s 18% deduction, this loan was cleared within weeks. The effective interest we paid vastly exceeded the legal limits. Square, on its own, adjusted the repayment amount. Yet, they continued to deduct funds from our account until the original amount was satisfied. We reached out to Square’s highest office for clarification. After explaining our situation, they went silent.
As a Franchisor, we recommended Square to our Franchisees. In March 2023, one of them took out a $14,000 loan from Square, structured similarly to our previous loans. He linked his personal bank account to his POS system. After a period of inactivity and non-payment of his dues to Square, an unexpected issue arose.
Several months passed without him making repayments. Suddenly, Square rerouted a $2000 transaction intended for us to his account, presumably to deduct their 18% from it. This was not just any transaction. It was a client’s payment for her marketing budget for the entire month of September. With Square diverting these funds, we were left in a precarious situation. How do we explain to our client that her payment, meant for critical tasks, never reached us? This client has payroll, bills, and other expenses she won’t be able to cover because of this debacle. Due to Square’s questionable actions, we are now caught in the crossfire of not just a financial quagmire but also a trust deficit with our clients. The entire scenario seems less like a system glitch and more of a deliberate malfeasance, which is unacceptable.